Understanding Inheritance Law in Indonesia

Dividing an inheritance can be one of the main causes of disputes within a family. That is why inheritance distribution is governed by law through clear rules. But what does inheritance law in Indonesia actually look like?

Understanding inheritance law does not have to wait until you reach old age, or until there is a need to divide a parent's estate.

In fact, it is even better to understand it now, so that you can distribute your own estate fairly in the future. In this way, you can also help prevent the risk of disputes arising within your own family.

What inheritance laws apply in Indonesia? In Indonesia itself, three (3) types of inheritance law are in effect. Read the list and explanations below for the full details.

3 Types of Inheritance Law in Indonesia

The inheritance laws in force in Indonesia are Islamic Inheritance Law, Civil Inheritance Law, and Customary Inheritance Law. Here is the full information.

1. Islamic Inheritance Law

As the name suggests, Islamic Inheritance Law is based on Islamic law and serves as the reference for distributing estates among Muslims in the country. Article 171 paragraph (a) of the Compilation of Islamic Law (KHI) explains that inheritance law is the law that regulates the transfer of ownership rights over the estate (tirkah) of the deceased, determines who is entitled to become an heir, and sets the share of each (source: IndonesiaRe).

Distribution under this law is based on the share of each heir, whose amounts are already fixed. However, an estate may also be distributed through a bequest to an institution or another person, provided the maximum amount is one third of the total estate; the amount may be larger as long as all heirs agree.

Referring to Articles 176-185 of the KHI, the amounts received by heirs are as follows:

A. A daughter receives:

• If there is only one daughter = one half.
• If there are two or more daughters = two thirds.
• If there are both daughters and sons = 2 parts for each son and 1 part for each daughter.

B. The father receives:

• If the deceased has no children = one third.
• If the deceased has children = one sixth.

C. The mother receives:

• If there are children, or two or more siblings = one sixth.
• If there are no children and no two or more siblings = one third.

D. The mother receives:

• After the widow/widower's share is taken, if together with the father = one third.

E. A widower receives:

• If the deceased has no children = one half.
• If the deceased has children = one quarter.

F. A widow receives:

• If the deceased has no children = one quarter.
• If the deceased has children = one eighth.

G. Death without leaving children or father:

• Brothers and sisters of the same mother = one sixth.
• Two or more siblings of the same mother = one third.

H. Death without leaving children or father:

• A sister of the same father or full blood = one half.
• Two or more sisters of the same father or full blood = two thirds.
• A sister and brother of the same father or full blood = 2 parts for the brother and 1 part for the sister.

2. Civil Inheritance Law

Next is Civil Inheritance Law, which consists of a set of legal provisions governing the legal consequences of property left upon a person's death, in which the deceased's assets are transferred and the consequences for the recipients arise, whether in their relationships with one another or with third parties.

Under Civil Inheritance Law, there are provisions for four (4) classes of heirs as follows:

A. Class I

Consists of the spouse and/or the descendants of the deceased, each of whom receives one quarter of the estate left by the deceased.

B. Class II

This class receives the inheritance if the deceased has no spouse and no children. It includes the parents, siblings, and/or descendants of the deceased's siblings. For example, the mother, father, and two full siblings of the deceased, each of whom receives one quarter. However, the principle is that the parents' share may not be less than one quarter.

C. Class III

This class receives the inheritance if the deceased has no full siblings. In that case, the heirs are the relatives in the direct ascending line, from either the mother's or the father's side. For example, the grandparents on the mother's and father's sides. The division is one half for the mother's line and one half for the father's line.

D. Class IV

This class consists of living blood relatives in the ascending line. The amount divided is one half, and the remaining half goes to heirs from other lines who are the closest in degree to the deceased.

3. Customary Inheritance Law

In addition to the two laws above, there is also Customary Inheritance Law, which is local law that is recognised, believed in, and practised by communities in particular regions or ethnic groups.

Since the Customary Inheritance Law in force in the country is shaped by the varied kinship structures of its communities, it is respected and observed, whether or not it has been set down in writing.

Broadly speaking, Customary Inheritance Law recognises several inheritance systems (Source: IndonesiaRe):

• Descent system, in which the deceased is a descendant of the father, the mother, or both.
• Individual system, in which each heir receives their own separate share.
• Collective system, in which heirs receive the inheritance, but control and ownership cannot be divided. In other words, heirs only obtain the right to use the estate or the right to receive its yield.
• Majorat system, in which the estate passes to the eldest child in place of the parent.

Unlike Islamic Inheritance Law or Civil Inheritance Law, Customary Inheritance Law does not recognise an heir's right to demand at any time that the estate be divided among the heirs. Usually, if an heir has an interest or a need, and is indeed entitled to inherit, they may request to use the estate through deliberation with the other heirs.

In principle, the distribution of an estate under Customary Inheritance Law varies, as it depends on the customs that apply.

Easing the Family's Burden During a Funeral

Regardless of which inheritance law in Indonesia you follow, a fair distribution of an estate is ultimately meant to safeguard the livelihood and well-being of the family you leave behind. For that reason, make the distribution as thorough as possible so that this goal can be achieved.

One way to do this is by choosing a funeral insurance plan from Kamboja. Through funeral insurance, funeral-related costs are supported by the insurer, which can certainly ease your family's financial burden in the future.